Sunday, December 6, 2009

Dub Bye

Like many he bought a flat off-plan in what was a red-hot property market. Today he is trapped, his passport confiscated until he repays bank loans he used to invest in a property that may never exist. If his work dries up before he can clear his debts he will go to jail.

We met at a coffee shop in Dubai’s vast Mall of the Emirates. Around us were some of Britain’s most familiar high street names — Next, Debenhams, Virgin, Costa Coffee and Harvey Nichols. For now trade is still brisk. “I’m struggling to know what to do really,” he said.

Borrowing from family to supplement his savings, Ross, in his early thirties, moved with his family to Dubai from South London in late 2006, put down a £60,000 deposit and arranged a £30,000 loan to help to cover the initial instalments on a £350,000 two-bedroom apartment in the Dubai Sports City development.

“The plan was to let the place out to cover the loan and mortgage but it was scheduled for completion by the end of 2008 and they haven’t finished the ground floor yet,” he said. Without the apartment to boost the family’s income, the high cost of living forced them back to Britain. The debts became overwhelming in a city where non-payment is a criminal offence. Ross returned for some contract work but he was held on arrival at the airport by the police.

The Sports City developer, Middle East Development, told him that work on his property will restart before the end of the year but will take at least 18 months to complete without any further delays. Even if it were to meet this schedule it will be three years late.

Ross’s options are stark. He must keep working to pay off the bank, borrow from his family, leave Dubai illegally and lose the apartment or go to jail. “The worst-case scenario is that I have to lean on friends or family to get the money together. It’s that or jail — it’s a no-brainer really.” For now he is looking no further than Christmas, trying to decide whether to fly his wife and three children out to Dubai for the holiday.

He is far from alone. The handful of cars dumped by expatriates at the airport each week bear testament to that, and talk of a speculative property market gone sour.

The scale of overbuilding in Dubai, paid for by a phenomenal debt binge facilitated by British and international banks, is hard to conceive until you see it. The world’s tallest building, the 2,600ft Burj Tower, is due to open next month. Its spectral presence looms over the city, its pointed top a needle to the bubble.

Sunday Times

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